Legislative Analysis
Phone: (517) 373-8080
LOCAL GRADE SEPARATION GRANT PROGRAM
http://www.house.mi.gov/hfa
House Bill 4523 (H-2) as reported from committee Analysis available at
Sponsor: Rep. Phil Green http://www.legislature.mi.gov
House Bill 4524 (H-1) as reported from committee
Sponsor: Rep. Darren Camilleri
Committee: Transportation
Complete to 6-29-21
SUMMARY:
House Bills 4523 and 4524 would amend 1951 PA 51 to require the Michigan Department of
Transportation (MDOT) to create and operate a local grade separation grant program for the
separation of motor vehicle traffic and railroad traffic. House Bill 4524 would describe the
program, create the Local Grade Separation Fund, and require certain reports. House Bill
4523 would require funding prioritization for projects meeting certain conditions, such as
proximity to specified facilities or institutions.
House Bill 4524 would require MDOT to create and operate a local grade separation grant
program for the separation of motor vehicle traffic and railroad traffic. Under the program,
MDOT would provide grants to cities, villages, and county road commissions for the
separation of motor vehicle traffic and railroad traffic (e.g., to build overpasses or
underpasses at railroad/highway intersections).
Grade separation would mean an intersection of a railroad and roadway at different
levels, with the railroad either above or below the highway (i.e., going over the
highway by way of an overpass or going under it by way of an underpass).
A funding application for the program would have to be made on a form approved by MDOT
and would have to contain information required under House Bill 4523 and by MDOT. An
application could be made at any time as determined by MDOT.
MDOT would have to establish a review process for considering funding applications that
includes the parameters for prioritizing the approval of funding applications proposed by HB
4523. No later than 180 days after receiving an application, MDOT would have to notify the
applicant in writing whether the application was approved or rejected. Grant funds would
have to be used within three years. Grant funds could be used for any stage of design and
construction related to either of the following:
• A grade separation project.
• A project that improves traffic at a rail crossing without a full grade separation, such
as construction of a rail siding or spur.
House Fiscal Agency Page 1 of 4
 Before releasing grant funds, MDOT would have to enter into a written agreement with the
funding recipient that provides for both of the following:
• The complete details of the grade separation or other rail crossing traffic
improvement project.
• A local, private, or federal match of at least 20% of the cost of the grade separation or
other rail crossing traffic improvement project.
In addition, before awarding grants under the program, MDOT would have to publish on its
website the parameters proposed by HB 4523.
Report
By December 1 of each year in which it received funding applications, MDOT would have to
report to the House and Senate appropriations committees and the House and Senate standing
committees on transportation on the use of funds from the local grade separation grant
program, including at least all of the following:
• The number of funding applications received.
• The name of each city, village, or county road commission that submitted a funding
application and whether each application was approved or denied.
• The amount of local match for each approved funding application.
Local Grade Separation Fund
The bill would create the Local Grade Separation Fund in the state treasury and allow the
state treasurer to receive money or other assets from any source for deposit into the fund. The
state treasurer would direct investment of the fund and credit to it interest and earnings from
those investments. Money in the fund at the close of the fiscal year would remain in the fund
and not lapse into the general fund. MDOT would be the administrator of the fund for
auditing purposes.
MDOT would expend money from the fund, upon appropriation, only to fund and operate the
local grade separation grant program described above.
Proposed MCL 247.661i
House Bill 4523 would require MDOT to develop parameters for prioritizing the approval of
funding applications for railroad crossing projects under the program proposed by House Bill
4524. The parameters would have to prioritize projects for railroad crossing projects that
meet one or more of the following conditions and give a higher priority to those meeting a
comparatively greater number of these conditions:
• The project is within 10 miles of a vicinity with an emergency planning zone, such as
a nuclear power plant or chemical plant.
• The project is within five miles of a railyard.
• The project is within five miles of a manufacturing facility
• The project is within five miles of a level I to level IV trauma center, adult assisted-
living facility, school, or courthouse.
• The project has an above-average vehicle traffic volume, as determined by MDOT.
• Any other condition MDOT considers relevant.
House Fiscal Agency HBs 4523 (H-2) and 4524 (H-1) as reported Page 2 of 4
 Railroad crossing project would mean either a grade separation project or a project that
improves traffic at a rail crossing without a full grade separation (such as construction of
a rail siding or spur)—i.e., the allowed uses of grant funds as provided by House Bill
4524.
Before awarding grants under the program proposed by House Bill 4524, MDOT would have
to publish the parameters described above on its website.
A funding application for a road crossing project would have to include a list of the North
American Industry Classification System (NAICS) designations for all businesses within a
five-mile radius of the project.
Proposed MCL 247.661j
The bills are tie-barred to one another, which means that neither could take effect unless both
were enacted.
BACKGROUND:
MDOT has regulatory authority over these crossings under the Railroad Code. MDOT has
authority to require safety improvements to crossings (lights and gates) and the authority to
order that a crossing be closed if it is determined that the crossing cannot be made reasonably
safe. MDOT typically works with the local road agency before ordering that a crossing be
closed; there has been only one instance in which MDOT ordered a crossing closed
(Highland Township) with opposition of the local road authority.
MDOT also has authority to order a rail grade separation but has never done so. The cost of
such separations is so great that it is not reasonable to order them without an identified source
of funding.
If a local road agency requests the establishment of a rail grade separation, the Railroad Code
provides for the requesting party to pay 100% of the cost of the separation1. The cost of such
separations varies based on a number of local factors, but can range from $10.0 million to
$25.0 million.
FISCAL IMPACT:
PA 1951 PA 51, often referred to simply as “Act 51,” governs state appropriations for most
Michigan transportation programs. Among other things, Act 51 establishes the Michigan
Transportation Fund (MTF) as the main collection and distribution fund for state restricted
transportation revenue. Act 51 also establishes other restricted transportation funds or
accounts dedicated for specific targeted transportation programs.
Section 10 of Act 51 directs the annual appropriation of MTF revenue, including to the
various restricted transportation funds and accounts. The distribution formula established in
1
http://legislature.mi.gov/doc.aspx?mcl-462-307
House Fiscal Agency HBs 4523 (H-2) and 4524 (H-1) as reported Page 3 of 4
 section 10 is described in the HFA Fiscal Brief, “MTF Distribution Formula to Local Road
Agencies.”2
House Bill 4824 would add new section 11i to Act 51 to create and define a new categorical
or targeted transportation program, the local grade separation grant program, and related
restricted fund, the Local Grade Separation Fund. The program and fund are described in
detail above. Although the bill creates a new program and a new fund, neither it nor its
companion bill, House Bill 4523, establishes a source of fund revenue. Specifically, neither
bill earmarks MTF revenue for the program. As a result, the bills as introduced would have
no direct fiscal impact on the state or on local units of government.
If a source of state revenue were identified and funds appropriated for the program, the bills
would effectively establish a program for benefit to qualifying local units of government.
POSITIONS:
Representatives of the following entities testified in support of the bills (6-15-21):
• Office of the Wayne County Executive
• Detroit Regional Aerotropolis Development Corporation
• City of Romulus
• Huron Township
The following entities indicated support for the bills:
• Department of Transportation (6-15-21)
• Michigan Railroad Association (6-15-21)
• Michigan Townships Association (6-15-21)
• Beaumont Health (6-15-21)
• Michigan Police Officer’s Association (6-15-21)
• Michigan Fire Inspectors Society (6-15-21)
• Michigan Firefighters Union (6-15-21)
• Michigan Professional Firefighter’s Union (6-15-21)
• Michigan State Firefighters Union (6-15-21)
• Michigan Association of Pupil Transportation (6-22-21)
Legislative Analysts: E. Best
Rick Yuille
Fiscal Analyst: William E. Hamilton
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
2
“Fiscal Brief: MTF Distribution Formula to Local Road Agencies – Update,” March 3, 2021. Prepared by William
E. Hamilton, Senior Fiscal Analyst. This publication describes the factors that govern the distribution of MTF
revenue to local road agencies (county road commissions and cities and villages).
https://www.house.mi.gov/hfa/PDF/Alpha/Fiscal_Brief_MTF_Distribution_Formula_to_LRA_Mar2021_Update.pd
f
House Fiscal Agency HBs 4523 (H-2) and 4524 (H-1) as reported Page 4 of 4


Statutes affected:
House Introduced Bill: 247.651, 247.675
As Passed by the House: 247.651, 247.675